The Allahabad High Court has ruled that Goods and Services Tax (GST) authorities cannot impose tax, penalty or interest on work completed before the introduction of the GST regime.
The case involved a work contractor who received notices for FY 2018-19 under the GST Act. An ex-parte order was later passed due to his inability to respond in time.
The contractor challenged the order, arguing that the disputed payment related to work executed for the Jal Nigam during 2015-16 and 2016-17, periods governed by the Value Added Tax (VAT) regime, not GST. He said VAT had already been deducted as required at that time.
Justice Piyush Agarwal held that payment made after the implementation of GST does not give authorities jurisdiction over transactions completed beforehand.
Since the work contract and execution occurred under the VAT system, the matter fell within the jurisdiction of VAT authorities.
The Court stated that GST officials could not assume authority merely because of discrepancies between GSTR-3B and Form 26AS.
“Once the record shows the petitioner executed a work contract allotted by the Jal Nigam prior to GST, subsequent payment cannot justify GST levy,” the order said.
The writ petition was allowed, and the ex-parte GST order was set aside.
Source from: https://knnindia.co.in/news/newsdetails/state/allahabad-hc-gst-authorities-cannot-levy-tax-on-pre-gst-work-contracts
